Hello import newbies,
Continuing on the import/export topic. Thought I discussed warranty. Not so long a go, there was a comany here importing electrical goods, from DVD player, TV to air cond units. It was a big company distributing nationwide through chains like Harvey Norman.
It was going well for a few years, the products were cheap and sold like hot cakes. Then the products started to break down and warranty claims skyrocketed. Pretty much every unit broke down. Even I was unfortunate enough to buy one of their DVD players, broke down within a month.
The warranty claims sapped the company's cash and it bankrupted. Moral of the story, be careful, be very careful wwhen it comes to products that requires warranty.
When you import a product, you bears all responsibilty of warranty claims. Product testing at the manufacturing plan is essential and quality control must be top notch. Suppliers know if you take your eye off the game and will substitute with cheaper components. They might save $5 but will cost you hundred in warranty claims. So, make sur you build enough fat into your margins to cover for claims.
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Excellent post.
Bear in mind that a factory warranty does not really mean much to you as a foreign buyer.
If products you import from overseas need repairs under warranty then you will have to ship them back to the supplier at your own cost, and then the supplier will ship them back to you at their cost or your cost depending upon what was agreed.
Now how well will that work if you have a number of units of the product that need repairs?????
Most importers will just trash faulty product and give customers replacement product as getting warranty repairs done is too costly and time consuming.
So as an importer you need to realize that you are pretty much on your own once the product leaves China. If you know your product and have the ability to get repairs done locally then you may be able to come to an agreement with your supplier to cover the costs of these repairs up to an agreed upon amount. But you need to get this in writing with your supplier, and in most cases they will not send you the cash but will just discount this amount off future orders.
- Always deal with products that you understand and not just products that you can sell at a profit.
- Always have someone who knows the product well to inspect it before it ships.
- Always plan on having a certain number of faulty units and claims.
I once come across a supplier who will give you spare parts (1% of consignment value), so it the product breaks down you can fix it. But that is assuming you know how to fix it. Last thing you need is getting electricuted.
c[ ]
Yes getting extra spare parts along with the shipment is pretty standard practice, but it overlooks the cost to you of repairing units. So if that is the avenue you are going down then you best negotiate an agreed upon amount per unit that the factory will cover you for repair costs. This amount can be discounted off any future orders according to what costs were incurred.
Not every factory will agree to the above, but the ones that do are the ones that are confident enough that their product will not need to be repaired and that is a very good sign.
Quoting from [jadedev]:Hello import newbies,
Continuing on the import/export topic. Thought I discussed warranty. Not so long a go, there was a comany here importing electrical goods, from DVD player, TV to air cond units. It was a big company distributing nationwide through chains like Harvey Norman.
It was going well for a few years, the products were cheap and sold like hot cakes. Then the products started to break down and warranty claims skyrocketed. Pretty much every unit broke down. Even I was unfortunate enough to buy one of their DVD players, broke down within a month.
The warranty claims sapped the company's cash and it bankrupted. Moral of the story, be careful, be very careful wwhen it comes to products that requires warranty.
When you import a product, you bears all responsibilty of warranty claims. Product testing at the manufacturing plan is essential and quality control must be top notch. Suppliers know if you take your eye off the game and will substitute with cheaper components. They might save $5 but will cost you hundred in warranty claims. So, make sur you build enough fat into your margins to cover for claims.
For home appliances items, I would pick up a number of circuit board, ask a friend of mine who specialized on the tech to test it, such like components they are using, and check whether the route on the board is correct on tech, bad quality components and incorrect route could also make it work, but its life not long.
But one important thing, not to pick up these finished circuit board after QC, we should pick it up before QC, so we can know their exactly quality. as most circuit board made in China are by hands not by machine, and QC by workers, so that quality would bassed on the workers, but who knows the worker who on this position work well.
If you can do by this ways, I think you would not need warranty.
Quoting from [Egernia]:Yes getting extra spare parts along with the shipment is pretty standard practice, but it overlooks the cost to you of repairing units. So if that is the avenue you are going down then you best negotiate an agreed upon amount per unit that the factory will cover you for repair costs. This amount can be discounted off any future orders according to what costs were incurred.
Not every factory will agree to the above, but the ones that do are the ones that are confident enough that their product will not need to be repaired and that is a very good sign.
For the repair costs, at my former employment we usually made a list of warranty repairs late each year and asked for a discount or a credit in the value of the repair labor from the supplier. However for this a long-term cooperation and technical knowledge is necessary.
c[ ]
nice post jadevev.
In our country, most companies selling goods requiring warranties such as electronics and appliances need to maintain a staff of competent technicians/repairmen to fix warranty covered products, I guess the cost of this service in included in the product's selling price and the importer's margins. This is a necessity and even if you are the dealer of a known quality brand like Sony or Nokia, I am sure you would also need to have repair staff...after all even these brands would have some form of warranties and eventual problems albeit at minimal levels.
I agree with the post mentioning your supplier's assistance in providing a certain percentage of spare parts. I have experienced a similar situation with some of our imports. The supplier agrees to provide 2-3% free parts but dont do so when the goods are eventually shipped. eventually request for parts pile up...the supplier agrees to send the parts for free but ask you to pay for the expensive courier cost....we have since stopped doing business with these kinds of suppliers.
How about this?
I bought an air cond for $350 from retailer. Manufacturer probabaly wholesale it for $200
It broke down while still under warranty. The repair agent is charging $99 for first 30 minutes and $38 for the next 30 minutes after that.
So it figures to use the best quality parts possible. Cheap will just send you broke.